Meehan and Another v Promontoria Scariff DAC and Another

• Jurisdiction: Ireland
• Judge: Mr. Justice Conleth Bradley
• Judgment Date: 05 March 2024
• Neutral Citation: [2024] IEHC 161
• Court: High Court
• Docket Number: Record No. 2023/218 CA

Between:

Anthony (Otherwise Tony) Meehan and Brenda Meehan

Plaintiffs

and

Promontoria Scariff DAC and Stephen Tennant

Defendants

[2024] IEHC 161

Record No. 2023/218 CA

(Circuit Appeal Record No. 6086/2019)

THE HIGH COURT

JUDGMENT of Mr. Justice Conleth Bradley delivered on the 5 ^th day of March 2024

INTRODUCTION

Preliminary

1 This is the Plaintiffs' appeal from the decision and order of the Circuit Court (His Honour Judge John O'Connor), dated 14 ^th November 2023 striking out the Plaintiffs' motion and refusing to allow an amendment of the Equity Civil Bill and Indorsement of Claim issued on 13 ^th September 2019 and further refusing to transfer the Plaintiffs' claims to the High Court. As this is a Circuit Court appeal, the application falls to be determined, therefore, by reference to the statutory jurisdiction and Rules of the Circuit Court.

2 Stephen Moran BL appeared for the Plaintiffs and Rudi Neuman BL appeared for the Defendants.

BACKGROUND

3 The Plaintiffs are a married couple who bought a residential property located at Apartment 59, The Water Mill, Bettyglen, Raheny (“the Property”) as an investment in 2007 with secured financing provided by First Active plc. First Active plc transferred the loan to Ulster Bank in 2010 and in turn Ulster Bank transferred the loan to Promontoria Scariff DAC (“Promontoria”) in late 2018.

4 Cabot Financial (Ireland) Limited (“Cabot”) acted as agent for the secured lender on dates relevant to the initial Equity Civil Bill and the proposed amended Equity Civil Bill.

5 Whilst the original loan provided for the monthly repayment of principal and interest, by virtue of an agreement in relation to alternative repayment arrangements (“ARA”), the Plaintiffs paid interest only on the loan until 1 ^st May 2018 and between the time the last interest only ARA and the new repayment ARA commenced, arrears of approximately €5,500 had accrued.

6 From in or around 4 ^th September 2018 on foot of a new ARA, as just mentioned, the Plaintiffs commenced making increased payments of interest and capital.

7 The alleged underlying dispute in these proceedings concerns the request by the First Named Plaintiff to have the accrued arrears of €5,500 capitalised ( i.e., add the arrears to the total amount owed and pay it back over the lifetime of the loan). In brief summary, the First Named Plaintiff alleges that he was assured that after completing six months of making repayments on the new ARA, his request/application for capitalisation of the arrears, which had accrued to that point in time, would be reviewed.

8 The Plaintiffs made six repayments under the new ARA and requested in February 2019 that the bank review the capitalisation request.

9 By in or around February 2019, while Cabot managed the loan on its behalf, Promontoria had acquired the loan.

10 The Plaintiffs' claim was pleaded initially by way of an Equity Civil Bill and Indorsement of Claim issued on 13 ^th September 2019, where the Plaintiffs sought specific performance of the ARA allegedly agreed between them and a Cabot official on behalf of Promontoria (as successor or assignee of Ulster Bank Ireland DAC), on foot of an initial telephone call on 27 ^th July 2018 and evidenced in writing by correspondence dated 8 ^th August 2008 and 30 ^th August 2008.

11 As pleaded out, the Plaintiffs allege that during the course of a further telephone conversation on or about 28 ^th November 2018 between Mr. Anthony Meehan and a Cabot official, it was represented to Mr. Meehan that the capitalisation of arrears, which had accrued at that point, would occur following six consecutive payments by the Plaintiffs of the new ARA (paragraph 10(b) of the Indorsement of Claim of the Equity Civil Bill issued on 13 ^th September 2019 alleges that the Cabot official or agent “… communicated that the alternative repayment arrangement provided that the arrears would be capitalized after six monthly repayments of €1,652, at which point the monthly repayment would increase to €1,680”).

12 The sixth and final payment of €1,652 was made on or about 1 ^st February 2019.

13 By letter dated 30 ^th April 2019, Promontoria wrote to Mr. Meehan and allegedly demanded repayment within seven days of the facility being the sum of €338,421.12 (including arrears of €5,562.84) and allegedly appointed the second named Defendant as receiver over the property from on or about 13 ^th May 2019.

14 It is alleged that by letter dated 26 ^th June 2019, Cabot sought to repudiate the alleged agreement on the basis that “… the documentation provided does not confirm that Ulster Bank DAC or Cabot Financial Ireland Ltd agreed to capitalise the arrears on the mortgage account.” In the initial Equity Civil Bill issued on 13 ^th September 2019, the Plaintiffs claim loss of rental income of €6,656 (ongoing) as particulars of special damage.

15 The Plaintiffs also allege that had they been informed that the bank would not agree to the capitalisation of the arrears as part of the ARA, or that entry into the ARA was contingent on the repayment of the arrears, they would have discharged the arrears then due.

16 The Defendants' Entry of Appearance was dated 7 ^th October 2019; the Defence was delivered on 2 ^nd March 2020; the Plaintiffs' Notice to Admit is dated 13 ^th March 2020; the Plaintiffs' Notice for Particulars and Notice to Produce is dated 13 ^th March 2020; the Plaintiffs' Supplemental Particulars of Special Damages is dated 20 ^th March 2020; the Defendants' Replies to Particulars is dated 7 ^th July 2023; the Plaintiff's updated Particulars of Claim is dated 18 ^th January 2023.

17 A document entitled “ Supplemental Particulars of Claim” dated 3 ^rd March 2023 was sought to be delivered by the Plaintiffs in “… amplification of their case against the defendants and as pleaded in the Equity Civil Bill issued 13 ^th September 2019 and the supplemental particulars of special damage delivered 20 March 2020.”

18 This document was essentially the forerunner of the proposed amended Equity Civil Bill and Indorsement of Claim attached to the letter of 6 ^th March 2023 and to the Plaintiffs' subsequent motion herein dated 4 ^th April 2023.

19 As mentioned, the “ Supplemental Particulars of Claim” dated 3 ^rd March 2023 presages each paragraph with the description “… in amplification of …” at paragraphs 5, 8, 10, 12, 13, 14, 15, 16, 17, and 21 of the Equity Civil Bill dated 13 ^th September 2019.

20 Mr. Neuman BL refers, in particular, to paragraph II of the “ Supplemental Particulars of Claim” which allegedly refers to the Plaintiffs' interaction with the Ulster Bank prior to the date of 27 ^th July 2018, which was the date of the alleged initial telephone call and agreement pleaded in the Equity Civil Bill dated 13 ^th September 2019. Reference is made, for example, to correspondence dated 30 ^th March 2018, 2 ^nd May 2018, 5 ^th May 2018, 14 ^th May 2018, 29 ^th May 2018, 8 ^th June 2018, 21 ^st June 2018, 28 ^th June 2018, 2 ^nd July 2018, 3 ^rd July 2018, 10 ^th July 2018, 14 ^th July 2018 and 23 ^rd July 2018.

21 The Defendants issued a motion on 8 ^th March 2023 seeking to strike out the “ Supplemental Particulars of Claim” (it appears that that motion and the costs of same stand adjourned).

22 In or around the same time, by solicitor's letter dated 6 ^th March 2023, the Plaintiffs withdrew the “ Supplemental Particulars of Claim” and effectively sought to substitute it with the proposed amended Equity Civil Bill/Indorsement of Claim, stating inter alia that:

“ We formally seek to amend the Civil Bill (as enclosed) so as to expressly plead/incorporate the Supplemental Particulars raised. We would invite you to consent to the delivery of the amended pleadings, and furthermore to consent to the exercise of unlimited jurisdiction by the Dublin Circuit Court. We confirm on behalf of the Plaintiffs, that they will discharge the Defendants' reasonable costs as may be associated with the foregoing i.e. the raising of such Particulars as necessary, and in view of the replies, the delivering of an amended Defence thereto.”

FIRST ISSUE: PROPOSED AMENDMENTS

23 By way of Notice of Motion dated 4 ^th April 2023, the Plaintiffs sought inter alia an Order pursuant to O. 65, r. 1 of the Circuit Court Rules (“CCR”) allowing the amendment of their Equity Civil Bill and Indorsement of Claim issued on 13 ^th September 2019. The proposed amendments were grounded on the Affidavit of Anthony Meehan sworn on 31 ^st March 2023.

24 The proposed amendments are as follows:

Basis for & appointment of receiver

The Claims for Relief

• (a) paragraph 5 of the Indorsement of Claim mirrors paragraph I of the Supplemental Particulars of Claim and provides a short history of the Plaintiffs' engagement with ARA;

• (b) the two proposed amendments at paragraph 8 of the proposed amended Equity Civil Bill/Indorsement of Claim (attached to the letter of 6 ^th March 2023 and to the Plaintiffs' motion dated 4 ^th April 2023) repeats Paragraph II of the Supplemental Particulars of Claim dated 3 ^rd March 2023. As set out earlier, for example, paragraph II refers to particulars of what is alleged to be the Plaintiffs' interaction with the Ulster Bank prior to 27 ^th July 2018, which is the alleged date of the agreement pleaded in the Equity Civil Bill dated 13 ^th September 2019.

• (c) the proposed amendments at paragraph 9 of the proposed amended Equity Civil Bill/Indorsement of Claim (attached to the letter of 6 ^th March 2023 and to the Plaintiffs' motion dated 4 ^th April 2023) repeats Paragraph III of Supplemental Particulars of Claim dated 3 ^rd March 2023 and refers to correspondence dated 7 ^th August 2018, 8 ^th August 2018, 28 ^th August 2018, 30 ^th August 2018 and 15 ^th November 2018 alleging separate correspondence as between the Plaintiffs, Ulster Bank and Cabot alleging inter alia agreement of the transfer of the mortgage to Promontoria, alleged confirmation...